AIBU in asking how much money you had left after buying your first home?

[jbevan6]

Myself and my partner are the first of our friends to be purchasing our first home, so without anyone else to ask, I’m hoping to find out the general consensus on here.....

We have found a property we would like to make an offer on and it is at the very top end of our budget when it comes to our borrowing facility. We are confident we can afford the repayments comfortably enough but our issue is the initial fees involved.

We just about have enough money to cover the deposit, stamp duty, legal fees etc. After we have paid all of these fees we will have no more saved money and would have to use all of the furniture in our current rented property (we already have all the basics as our property was totally unfurnished).

Are we being absolutely stupid here? I was originally of the opinion that all first time buyers put absolutely every last penny in to buying their first home but I’m worried I could be wrong and this is not the norm!
Thanks

Interest rates are a very real factor. The US has raised interest rates and the financial people on radio 4 yesterday were saying that it is likely that this will result in interest rates in the UK rising sooner than anticipated (previously they were saying the back end of 2018 before they'd start to go up).

Those buying houses and stretching themselves to the max should remember that around 5/6% is the average historically. We are in a period of exceptionally low rates at the moment.

We already had most of the furniture we needed. But I don't remember moving in to the house with loads of spare cash in our account.

The problem we had was our multiples came nowhere near the price of a tiny studio so although we borrowed our maximum we had to put a substantial amount down.

Agree that people today think it was so easy. All I remember was working and working and occassionly sleeping. Dp was a qualified professional and most of the people we knew were accountants or solicitors and it was more unusual to find someone not doing a second job waitressing shelf stacking or doing bar than just having the one full time job.

So it gives me the rage when I hear people say we were lucky.

I was single when I bought - a hell of a lot of scrimping and saving went on for a long time before I could afford the deposit, including working in pubs etc as extra income. Most of my furniture was given to me second hand and if there hadn't been a fire that gutted a part of the flat pretty much, I'm guessing I would still be using it. I do still have some pieces left with which I won't part.

The day I made the last payment on my mortgage I went out with friends and paid for everyone to get completely smashed

When exH and i went for our flat we had 6k savings which had taken us 3 years to accumulate (2003). We went to the bank and they asked if we had a deposit/savings and we proudly said yes. The guy laughed and said 'that will just cover costs so no then' and did a big cross on the form. We felt crushed. They offered us a 100% mortgage of 140k and we were both on 15k per annum.

There was no way we could have afforded to build up any savings after moving in on that salary and then when we divorced and sold in 2010/11 it was in negative equity. We bought the only thing we could afford, that in the shittest area, that we could still commute to work from and it was at the top of the budget. It was a mistake because it was a poky flat and we quickly grew out of it and exH refused to contemplate having a baby in such a hole. It was one of the reasons we divorced. We just couldn't leave it and felt horribly trapped and i was desperate for a baby.

The previous house DH and i bought was also top of our budget at £222k. A '3' bed victorian semi (2 doubles and a tiny room you could only fit a cot or desk in which we used as a walk in wardrobe as it was north facing and freezing and overlooked a train station and was too noisy for the dc) with no garden (due to railway line/station behind) which needed loads of work. We thought we'd be fine but within a few months realised we'd bought too small and the work needed was very stressful.

We had an inheritance so then could buy bigger, but if it hadn't have been for that we would have been miserable.

I would say think how your needs will change and how well the property will cope. It's expensive to keep moving every few years (like we have).

I've just checked out the maths, in the 90's we had a 60k mortgage and the interest payments alone were £769/month. Lots of people were losing their homes and getting them repossed because they didnt understand that a 1% rise in the interest rate meant that their mortage repayments would increase by far more that 1%

I bought in 97, house prices had crashed and a lot of people were in negative equity. The interest rate was 7.25% at the time, lower by far than it had been for a long time. I got lucky in buying as a single person on a low income, pounced at the right time and the person I had bought from had to sell at a loss. so yes I was lucky indeed, it was a small period of time where houses were cheap (I'm in SE).
The average house price at the time was around £61k

I would never in my wildest dreams be able to buy that property now, it's currently on the market at £325k I bought for £39k. That 39k then felt like £39k does now - peanuts.

I remember when the average house price hit £100k, it seemed ludicrous.
A lot can happen over a decade, what was true when someone bought in say '87 isn't the same as when someone bought in '97.
Back then I took a lodger for extra spends, it wasn't in any way essential to keeping the roof over my head as it is for so many now.

A lot of people have benefited from very low interest rates,, seeing their mortgage payments slashed to a few pounds which provided an excellent chance to pay the mortgage down quickly or have large amounts of disposable income (not often talked about in threads where people wonder where other people get their money from) Indeed my own mortgage was slashed to £285 a month. (current house.
Of course though, there is no interest to be had on savings at that's a real problem for many. When I sold my first property and had the proceeds in saving for a while I got hundreds a month in interest now it would be pennies.

Swings and roundabouts, God alone knows what happens to the housing market next.

We had nothing left at all, and felt fine about that.
We used interest free credit for basically everything including carpets from carpetright, sofas from dfs, etc. Actually even our wedding rings! 😂

We had nothing left at all, and felt fine about that.
We used interest free credit for basically everything including carpets from carpetright, sofas from dfs, etc. Actually even our wedding rings! 😂

A lot of people in the 90's were mis-sold endowment mortgages and insurances, so didn't have the flexibility that they should have. Nor did they have the unemployment/sickness cover that they were sold.

That's on top of a lot of redundancies, particularly Up North.

For many, mortgages were a new thing and they were lied to.

If buying a home, uses all of your savings and even having to lend a small amount from family, then so be it. If it works out cheaper/same as renting, you'll profit in the long run.

You'll be skint for a while. But you're in love and you'll love your home, so it won't matter. Go for it.

We bought when multiples were adhered to very strictly.
5 years later and there was definitely a change in mortgage lending but having said that you still couldn't get anything you asked for.

I had nothing left savings wise from my share of the house but my partner had roughly £1000 left which was then used for stuff we needed. Money isn't tight, we have money left over after all the bills are paid but a year on and I'm only now building up any semblance of savings. My job isn't particularly well paid though! I don't mind as it's our "forever home"

We had about £1k left and then realised that the hob/oven wasn't actually working so we had to replace it - got the money back eventually though as the vendors had some how neglected to mention it was kaput.

About £25 - and I was pretty much maxed out on credit cards too. But it all sorted itself out in a year - a year where I spent v little apart from in B&Q.

I used second hand stuff, slept on a blow up bed for a year and used a fridge I got off freecycle.

Not much at all! What we had left went towards a new boiler and oven.
Just remember that the first mortgage payment is always more than what your monthly payments will be!

Go for it and then scrimp for a bit. You'll kick yourself if you let this one go then prices increase while you wait for the next perfect property.

I reckon house buying still costs the same percentage of income as it did in the 90's
Mortgage of 60k in the 90's at 15% is £769 interest only per month
above average salary for two people £30k thats both incomes added together and a higher income tax rate than now.

Similar house now, 3 bed house is £420k on rightmove mortgage repayments £1963 however in looking up payscales for our London bases jobs in today's terms our joint incomes would be about £80k.
Obviously both those stated incomes would include lots of overtimeworked etc

Nothing, and it was horrible. Was months before I could start to make the house look nice! But it was worth it - I absolutely love this house.

About £600- emergency funds. (20 years ago!)

We had second hand furniture, slept on a sofa bed and lived on cheap food. We got furniture as presents when we got married 10 months later- we were so proud of the sofa!!

Not a single bean. I bought the flat as a fixer upper 9 years ago. We are just about starting to fix it up now. There is no hope of progressing to a house they are just too expensive. The leap from flat to house is about £100k in the SE. As above we have handed down furniture and we are very, very slowly making it our own.

I think it is pretty typical to be wiped out completely by your first house purchase.

You don't need much, you can 'camp' for a while, use old furniture for years and do things a bit by but whilst you build up a bit of a buffer, then do some some things on credit like sofa if you need one.

Nowt. You're supposed to be skint, you're supposed to live on Love 'n' Stuff aren't you.
His mum bought us a bed, my mum bought us a cooker, I bought the fridge in a secondhand shop, my big sister conveniently bought herself a new three piece suite so we had her hideous floral reject. We hired the telly.
Now I have a Tempur mattress, five flat screen TVs, leather seating and an American style fridge freezer with ice maker thingy. And a houseful of teenagers. But I remember the skint days quite fondly. We always seemed to scrape together enough for beer on a Friday night....

Honestly - we had 17p left in our bank account on completion.